This is geopolitics, not a long crude call. Iran and Oman — the two states that actually abut the Strait of Hormuz — met this week and announced progress toward a “permanent navigational corridor and future administration” of the waterway. Iran’s military went further and claimed a revenue-sharing deal on future tolls. Oman did not mention tolls. The United States does not like any version of this. If you do not have a defined risk on energy, you do not need a new one because a headline used the word “tolls.”
What Yahoo Finance reported
Ben Werschkul’s Yahoo Finance piece is the match for this permalink. Foreign ministers Abbas Araghchi (Iran) and Sayyid Badr bin Hamad Al Busaidi (Oman) met in Tehran. A joint statement described a phased approach: a temporary joint corridor, a mine-clearing project, then technical talks toward a permanent corridor and joint administration, “as well as a mechanism for information-sharing, traffic management, and the provision of relevant navigational and security services,” in Oman’s English translation of the Arabic statement.
IRGC spokesperson Hossein Mohebbi, via the state-run Sepah News agency, claimed: “Agreements have been reached regarding each country’s share of the strait’s waters as well as Iran and Oman’s share of its revenues.” That is Iran asserting tolls despite U.S. wishes. Al Busaidi’s own summary did not mention revenue sharing. He talked about “practical arrangements to restore safe navigation” and said, “I am hopeful we will soon announce a temporary corridor for the Strait of Hormuz and practical arrangements to restore safe navigation.” Unfinished, on purpose.
Ship-tracker Kpler, as Yahoo cited: transits “remain subdued,” with just five crossings on Tuesday, all on Iran’s preferred route. Strait traffic has been less than a tenth of prewar levels for weeks. Bloomberg’s parallel report said about a fifth of the world’s oil and LNG used to pass Hormuz, and that the strait has been largely closed since March after Iran moved to block it following U.S. and Israeli attacks on February 28 that killed Supreme Leader Ali Khamenei. That closure context is why five ships is a market input, not a trivia fact.
Immediate effects on shipping levels, Yahoo said, are unlikely. Trump continues to tout a U.S. blockade; the administration promises more sanctions. Signum Global Advisors told clients the Iran-Oman progress could pressure Washington and Tehran toward a fall deal, or even get the U.S. to live with joint Iran-Oman control, in part because “the US midterms make the Trump administration vulnerable to last-minute Iranian escalation against Gulf energy infrastructure.” That is a consultant note, not a prediction I am adopting.
The U.S. problem, in the president’s own words
Werschkul: Trump has threatened to bomb Oman if it “gets in the way.” The quote Yahoo printed from earlier this month on Fox News: “If Oman gets in the way, we’ll bomb the s*** out of them.” The joint statement did not discuss U.S. involvement. Trump this week claimed all mines were already out of the strait, that Iran is failing under sanctions, and has posted an image of Hormuz as “new US territory.” The White House had no immediate reaction to the Iran-Oman announcement in Yahoo’s account. Fox News later reported the White House would not say whether Trump would accept a restriction on U.S. warships.
Iranian Deputy Foreign Minister Kazem Gharibabadi, on state television, described a temporary inbound route through Iranian waters and an outbound route through Iranian and Omani waters, with 30 to 60 days to discuss a permanent plan. He said a potential agreement would exclude military vessels. Oman’s public statement, as Fox noted, did not mention a military-vessel ban, transit fees, or revenue sharing. Iranian officials also told Reuters the arrangement was not final. Read the gap: Tehran is selling a done deal with tolls and a warship ban. Muscat is selling a temporary corridor and mine clearance. Those are not the same communiqué.
What it means in California
California does not import its crude through Hormuz, but it burns a gasoline price that still moves with global barrels and with inflation expectations. Mortgage rates, as Claire Boston reported the same week, have been stuck near 6.7% in part because of the Iran war’s effect on oil and on those inflation expectations. Core PCE at 3.3% is the Fed’s problem; $4-something California regular is yours. A “toll” regime that never actually reopens the strait is a risk premium. A reopened strait with a fee is a different premium. Neither is a reason to buy a leveraged crude ETF on a Thursday.
Crude, tanker rates, and the next CPI energy line all sit downstream of whether commercial traffic actually resumes. Five ships is not a resumption. Bloomberg’s IRGC-revenue story and Oman’s silence on fees are the tell: there is no contract to trade.
Caveats
Do not flatten “joint statement” into “deal.” Do not flatten IRGC comments into Omani policy. Do not flatten Trump’s social-media map into admiralty law. Educational commentary, not investment advice, and not a geopolitical forecast. Sitting this out is allowed.
Source: Iran and Oman move closer on ‘future administration’ of Strait of Hormuz. Tolls are in the mix. (Ben Werschkul, Yahoo Finance); Iran, Oman Agree to Share Strait of Hormuz Revenue, IRGC Says (Bloomberg via Yahoo).
The Hedge 